New Mexico senator's bill to end $50M filmmaking cap

SANTA FE -- A state senator said Monday he will introduce a bill to eliminate the $50 million annual cap on taxpayer subsidies for movies and television series made in New Mexico.

The proposal by Sen. Phil Griego was one of the more concrete job-creation measures outlined by Democrats in both houses of the Legislature. Griego, D-San Jose, said the annual limit on rebates had made the state less competitive in attracting moviemakers and television production companies.

"We have to send the word out to the industry that we're stable and we want them here," he said.

His proposal could face opposition from Republican Gov. Susana Martinez. Two years ago she suggested a reduction in subsidies to moviemakers, then endorsed the yearly cap as an alternative.

When told of Griego's proposal, Martinez's press secretary said the state's incentive package for moviemakers already was "highly competitive."

Moviemakers and television producers receive a 25 percent return on qualified production expenses. It means a filmmaker with $20 million in expenses gets back $5 million from the state treasury.

But with the yearly cap, rebates may not be paid as quickly as they once were. Some filmmakers may have to wait for the next budget cycle to receive their subsidy. That system means they may take their projects elsewhere, Griego said.

He said Democrats in the Legislature have the onus of convincing Martinez that ending the cap would be good for business.

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Martinez in 2011 wanted to cut the movie subsidy to 15 percent. Instead, a compromise with legislators kept the rebate at 25 percent, but total annual payouts to moviemakers and TV series were restricted to $50 million.

"The governor and the Legislature, in strong bipartisan fashion, approved the film compromise to provide predictability and stability in the state budget, and to protect necessary funding for important priorities like education and health care," said Enrique Knell, the governor's spokesman.

Griego and other Democrats, including freshman Rep. Bill McCamley of Las Cruces, say the cap is shortsighted.

"If we're making even $1.10 for every $1 of incentives, we are losing money with the cap," McCamley said.

Griego said lifting the cap would bring more movies and TV series to New Mexico, thereby putting people to work and creating more business for hotels, restaurants, rental car agencies and other service companies

Rebates for moviemakers started under Republican Gov. Gary Johnson and escalated under his successor, Democrat Bill Richardson.

New Mexico paid nearly $100 million in rebates the year before the cap took effect. That meant TV and movie production companies spent about $400 million in the state.

But not everyone is sure that the subsidies are a wise use of taxpayers' money. Over the years various legislators, notably former Republican Rep. Dennis Kintigh of Roswell, said the rebate system actually hurt the state economy.

The question of how good -- or bad -- movie subsidies are for the state remains unanswered. A law approved in 2011 requires a breakdown of the economic pluses and minuses of subsidizing filmmakers, but that analysis still has not been completed.

Sen. Timothy Keller, D-Albuquerque, sponsored the bill requiring a comprehensive review of the rebate program. Martinez's administration has not begun the work, so frustrated legislators are turning elsewhere for the answers.

McCamley said he would revive the Keller bill this winter but assign responsibility for the economic analysis to State Auditor Hector Balderas instead of the governor's administration.

Keller said the rebate system could be tweaked in ways other than an elimination of the cap.

He said one idea is to create separate rebate categories -- one for TV series and the other for movies.

Television, he said, brings series such as AMC's "Breaking Bad," whose five-year run translated to more consistent work and bigger paydays than a movie with a one-time production schedule. But a TV series could eat up much of the cap, dissuading moviemakers from selecting New Mexico as their production site. That might make a two-tier system better, Keller said.

Milan Simonich, Santa Fe bureau chief of Texas-New Mexico Newspapers, can be reached at msimonich@tnmnp.com or 505-820-6898. His blog is at nmcapitolreport.com